Today's insight: GBP finds buyers after construction surge | USD gains on employment surge
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GBP finds buyers after construction surge
Output in the UK construction sector shot up in September. The construction sector purchasing managers index came in at 57.2 in September, well above the August figure of 53.6 and the highest level in 11 months. The new orders component of this survey hit the highest level in 2 1/2 years. The importance of the construction sector is such that it is likely the Bank of England will take stock before discussing any further interest rate cuts. That extends the quality of the yields available in GBP investments and makes the pound a little more valuable. Hence, sterling, which had fallen for the previous two days, made a small recovery on Friday. As at this morning, in the interbank market, the pound is trading at just above USD 1.31 and EUR 1.1950. Sterling is also up to AUD 1.9280 and NZD 2.1290 this morning. We may get a little insight into the Bank of England's thinking when the hearings take place on Thursday regarding the BoE monetary policy report. Meanwhile, there is very little UK data to peruse but plenty from elsewhere.
USD gains on employment surge
The US Federal Reserve is another central bank but maybe considering whether to hold their base rate after a very substantial improvement in the US employment market, as evidenced by Friday's employment report. 254,000 fresh US jobs were created in the month of September, bringing the unemployment rate down a notch to 4.1%. These figures are significantly stronger than the markets had expected and that caused the US dollar to strengthen a tad. That strength didn't manifest itself in all currency exchange rates. Sterling also had a good day, so the GBP/USD rate climbed back above USD 1.31 but the EUR/USD rate is down to $1.0965. As well as the impact of the continued conflict in the Middle East, the US dollar will be impacted this week by inflation data, due for release on Thursday.?
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Today's Major Economic Releases
09:00 EUR Retail Sales (YoY)?(Aug)?
Interbank Exchange Rates